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Santa’s Mixed Bag; Sapientis’ Promise

By Francisco Javier Cimadevilla

August 19, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

Whether you are a kid or a kid at heart, you never really know what Santa will bring you until you open your presents on Christmas Day.

Puerto Rico’s business community, particularly the retail industry, is desperately hoping for a strong holiday shopping season.

The consensus among retail industry experts and economists interviewed by CARIBBEAN BUSINESS is that this year, holiday retail sales will surpass those of last Christmas season, but not by much. One forecast pins the real growth in holiday sales expected this year at 5%, provided economic trends stay on track. Last year, December retail sales amounted to almost $1.8 billion.

But given the mixed signals the local economy has been sending in the first seven months of the year, we probably won’t know what’s in the bag until the Three Kings are well on their way back to the Orient.

To be sure, retailers are getting ready. Most of them have ordered larger holiday merchandise inventories than last year. Many are opening new stores, refurbishing existing stores, and adding new product lines, all in the hopes of enticing more holiday spending by shoppers.

What they are banking on is the positive performance the consumer retail sector has had so far this year. According to government statistics, accumulated retail sales from January to May (the most recent month for which data are available) totaled $7.2 billion, up 7.5% from the same period in 2003, when sales totaled $6.7 billion. In May alone, retail sales jumped to $1.5 billion, up 7.3% from $1.4 billion in the same month in 2003. Furthermore, some of the retail categories that have performed best so far this year include high-ticket, nonessential items, which suggests that consumers are once again betting on positive economic trends.

But the overall improvement in retail sales reflected in official government statistics don’t necessarily jibe with the reality confronted by many retailers who haven’t seen better sales so far this year.

Despite encouraging employment numbers for July, when government reports put unemployment at 10%, the job market has basically remained flat during the past 12 months and still isn’t recovering from the loss of almost 45,000 permanent jobs from 2000 to 2003. Furthermore, constant increases in the Consumer Price Index (CPI), driven by rising gasoline prices, continue to put a strain on the average middle-class pocket. Political turmoil in three of the largest oil-producing countries—Iraq, Venezuela and Russia—have driven its price to the unprecedented high of $46 a barrel.

Some observers have pointed out that the elections are almost certain to inject a renewed optimism in consumers and the economy as a whole. They note that people are so fed up with the way things are going and so eager for a change that, regardless of the outcome of the election, the prospect of ushering in a new administration will bring about a positive change in the economy.

So it seems, after all, that we will have to wait till after Christmas to know for sure what Santa brings.

Sapientis’ promise

In the midst of so much negative news regarding the dismal state of the island’s public education system, one of our Special Reports today highlights one of the most courageous and promising initiatives we have seen in years.

Almost two years old and 240 members strong, Sapientis is the local version of Teach for America, a stateside, private, nonprofit organization that strives to provide quality education to mostly poverty-stricken urban areas.

Its members, outstanding, mostly local graduates from stateside universities, commit to teach in island public schools for two years, thus helping to reinforce the quality of public education in the short term. In 2003, Sapientis members taught more than 2,000 students in all grade levels in a broad range of subjects, including English, health, social studies, and Spanish.

More important, these future island decision-makers share in an experience that will permanently instill in them an urgency to do something to fix public education.

Puerto Rico’s public education system has been in a crisis for years. Its decades-old record of severe underperformance and underachievement is at the root of the island’s multiple social ills. Experts agree the problem requires short- and long-term solutions.

Sapientis strives to provide both. It deserves recognition and support.

This Caribbean Business article appears courtesy of Casiano Communications.
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